Michael Saylor Drops Bombshell: Proof-of-Reserves Is a ’Liability’ for Crypto

MicroStrategy’s Bitcoin evangelist just threw shade at the industry’s favorite audit tactic—calling it a risk, not reassurance.

Why it matters: When the guy who bet his company on BTC dismisses transparency tools, even true believers raise an eyebrow. Cue the ’trust us, we’re decentralized’ chorus from crypto CEOs sweating their next reserve report.

The kicker: In crypto, the only thing harder than explaining PoR math? Finding an exchange that actually passed one. (Looking at you, ’fully reserved’ platforms that folded faster than a Solana NFT project.)

Michael Saylor Rejects Proof-of-Reserves in Shocking Statement

There are few people as connected with Bitcoin and the cryptocurrency sector as Michael Saylor is. The executive has been a champion of the asset class for years. Moreover, his technology firm has been one of the biggest buyers of the asset class, putting their money where their mouth is.

Yet, he has recently drawn some criticism for a rather interesting position he took on a vital aspect of the sector itself. Indeed, Strategy founder Michael Saylor recently called proof-of-reserves a liability in a statement. Specifically, he said as much while rejecting the practice of disclosing proof of holdings.

“If you publish your wallets, that’s an attack vector for hackers, nation-state actors, every type of troll imaginable,” Saylor said in a recently surfaced X (formerly Twitter) post. “It creates so much liability you should think twice before you ever do it,” he added.

Additionally, Saylor noted these reverses aren’t an accurate representation of a company’s financial health. However, it stands in the face of common practice. After the collapse of FTX, proof-of-reserve audits became commonplace to ensure individuals could observe disclosed funds.

Without that, they are unable to verify the well-being of a customer, and thereby they are unable to verify the well-being of their own funds. He may encourage thinking twice before publishing the audit, but any investor should think twice before putting money into a company refusing the disclosure.